Cover Story
The decline in eurozone prices is the most dramatic example of deflationary pressures afflicting the globe. All eyes are now on European Central Bank chief Mario Draghi and his efforts to reverse that trend.

It is essential for companies to work with banking partners they know they can trust. Global Finance’s annual ranking of World’s Safest Banks have been the recognized and trusted standard of financial counterparty safety for more than 20 years.

Global SalonGlobal Finance sat down recently with Andrew Spindler, president and CEO of the Financial Services Volunteer Corps, which has spread the gospel of sound financial systems to the developing world for the better part of a quarter of a century.

This year, we updated the name of the awards to reflect the extent to which digitization is transforming our lives in general and banking in particular. By renaming this as the Digital Bank Awards, we are making the competition more inclusive of current technology and more future-focused in anticipation of developments still to come.

Emerging Markets: Middle East

Advertisement

Jordan and Iraq signed a free trade agreement in Baghdad on September 3 that will expand already fast-growing trade between the neighboring countries. Jordan’s prime minister Nader Dahabi asked Iraq to double the amount of oil it sends to Jordan, which is almost totally dependent on imported oil. Dahabi met with his Iraqi counterpart, Nuri Al-Maliki, and pointed out that merchandise trade between Jordan and Iraq nearly doubled to $489 million in the first half of 2009 from $262 million in the same period last year. “We aspire to see this figure doubled again when obstacles to the flow of goods and movement of people are removed,” Dahabi says. Jordan’s main exports to Iraq are food and medical supplies.

Iraq was once the main supplier of oil to Jordan, but the flow was interrupted by the 2003 US-led invasion of Iraq. Dahabi says Jordan will be able to receive more oil from Iraq once repair and maintenance work on the Kirkuk-Banias crude oil pipeline is completed. The pipeline from the Kirkuk oil field in Iraq to the Syrian port of Banias was damaged by US airstrikes in 2003 and has been out of operation since.

In Amman, Jordan’s finance minister, Bassem al-Salem, said the World Bank would extend a $300 million low-interest loan to Jordan to help it cope with a record budget deficit caused by rising spending and declining foreign aid during the global financial crisis.

Elsewhere in the region, Gulf-based Arab investors are buying US real estate once again to take advantage of lower prices. Kuwait Finance House signed a $450 million joint venture agreement with UDR, a US-based real estate investment company. The venture will purchase income-producing residential properties in major US cities. Bahrain-based Investcorp recently purchased $170 million of mortgage loans in the United States.

In Dubai, the new Metro began operating on September 9, although the entire network will not be completed before 2014. The $7.6 billion Dubai Metro will substantially cut transportation costs and relieve traffic congestion in the city. When running at full capacity, it will be the world’s longest driverless train system, with 43 miles of track.